Saving money on credit card processing should matter. It makes a difference in overhead costs for your business and it may surprise you to learn how much you are spending on fees and services. It may be time to re-evaluate your needs and find a better deal. When it comes to the cheapest credit card processing, make sure you don’t get scammed or taken advantage of.
Verify the provider, their reputation, and their terms before you sign up. There are benefits with cheap processing, but make sure none of the essentials you need are eliminated to save money. When you can get a better deal, more of the money coming into your business will be profits. Since most people pay with credit cards for purchases, it is to your advantage to find out about the options.
Merchants can’t afford to not have credit card processing available to their customers. Yet it doesn’t make sense to pay more for those transactions than you have to. Many merchants are surprised to learn there are vast differences in the structure for credit card processing. Finding the best deal for your business is worth taking a closer look at!
How Much are you Currently Paying?
Unfortunately, many businesses of various sizes don’t know how much they currently pay for credit card processing. They were thrilled to get a merchant account set up and they have paid what they agreed to since then. The merchant account may not be the best one though or have high fees. If your business completes a high number of credit card transactions per day, those fees can add up fast.
If you have a high-risk merchant account, you may already pay more than the average merchant. This is due to the risk involved with your type of business. Some businesses are classified as high-risk and you can’t change that. In other situations, you have a high-risk merchant account due to a high percentage of chargebacks. With some positive changes within the business to lower the chargeback rate, you may be able to change to a regular merchant account and save money.
Structure of the Fees
The structure of the fees you currently pay depends on how it is set up. For the cheapest credit card processing, the format of your business needs to be considered. For high volume, a flat rate is a good idea. This is also true if you sell big-ticket items. A flat rate tends to be less than a percentage of the transaction amount.
Identify the pricing structure you are currently involved with for your business. On average, how much do you pay per day for credit card processing? Go through the statements you are sent each month. There may be additional fees you didn’t pay attention to and they are cutting into your profits. The effective rate is what you pay to the provider for your credit card transactions.
If you don’t see those details on your merchant statements, reach out to them for further assistance. Get a clear understanding of what you pay for and the cost when credit cards are processed for your business. Armed with this information, you can compare other offers and identify cheap processing options. If you have the best deal, that is great news! If not, it is time to get a new merchant account set up!
Credit Card Processing Options
Spend some time evaluating other credit card processing options available to you. Who is offering them? What is their reputation? How long have they been in business? Can you lower your costs while keeping the same benefits or even getting additional perks? You need the merchant account to work for you, not create problems.
Don’t forget to check out reviews from other business owners. Their experience with a given provider can help you compare them. Understanding the pros and cons of a provider before you switch to them is important. Saving money isn’t worth it if you won’t have the processing you need in exchange.
Look for providers offering straightforward pricing. When you visit their website, you should be able to see what the cost would be for them to host your merchant account. Make sure you read the terms and conditions too. Otherwise, there can be additional fees you will incur for credit card processing.
When you read those details, you may discover the offer isn’t as great as they made it out to be. Some providers charge you a monthly service fee or even fees for your statements to be generated. Those fees can add up fast, and reduce the value of the prices they show online for processing. Since they disclose them, they can legally charge them. This doesn’t mean it is ethical or the best option for you.
Make sure you look at the Following for Credit Card Processing
The specific breakdown of fees for credit card processing depends on the provider. Make sure you look at all of the following. If you identify anything else your business needs, find out the fees for them also. When you have the information to compare side by side it helps you identify the cheapest credit card processing available. Take a close look at:
- Additional fees for statements, service fees, etc. added every month.
- Contract details. Can you go month to month with the provider or do you have to agree to a specific time frame? If you decide to break that contract, what fees would apply?
- Currency conversions if you offer credit card processing globally.
- Hardware costs. You may have to pay fees to purchase equipment or monthly fees to rent the equipment to complete credit card transactions.
- Minimum amounts for a credit card transaction. Many providers require an amount of at least $5.
- Transaction rates. It may be a percentage of the transaction or a flat rate.
Ask Questions and Clarify Information
When you find cheap processing, verify the information. Ask questions and clarify details. Confirm other businesses have had a good experience with that provider. You don’t want to get into a mess with a provider charging less but one that makes it a hassle for you to complete credit card transactions. They should make it easy to track what you have received and they should pay the funds timely. Otherwise, your business could end up with a cash flow problem.
Negotiate with your Current Provider
If you like the services from your current provider, but it isn’t the cheapest credit card processing, try to negotiate. Reach out to them and talk with a supervisor about your account. Share with them you would like to stay with them but their prices are higher than what you have found elsewhere. Ask them to negotiate what they offer to you.
Many providers will negotiate when you have a good merchant account with them. They would rather make less money from you than see you go to one of their competitors. They should be willing to match or beat the other offers you found. If they aren’t willing to do that, thank them for their time and let them know you will be changing providers.
If there will be a charge to end your contract with them, ask them to waive it. They may be willing to do so. If not, it can still be worth it to make the change. The cost to end that contract with them may be less than the higher cost of credit card processing if you stick with them until the contract expires.
Change Providers
Only change providers once you have confirmed they offer cheap processing and excellent service. Complete the required application and give them time to process it. Once that is complete you can work with them to make the change smooth and simple. You may need to change equipment when you change providers. You may need to change a few policies and options for how you process your credit card payments.
Annual Review
Don’t hesitate to check your options again in a year. The goal is to continue with the cheapest credit card processing that also fulfills your needs. Competition among merchant account providers can work in your favor. Changes to your business and what it offers can also influence credit card transactions. As your business grows, it may be time to change plans or to change providers.
Accepting credit cards for payment makes it fast and easy for consumers. They also have peace of mind because of the protection offered against fraud and other issues with credit cards. While there are fees associated with credit card processing, strive to find a way to keep them to a minimum. Evaluate options to ensure you have the best deal possible.
Pay too much for credit card processing is a common mistake many business owners make. They assume all providers charge the same fees. They don’t pay attention to their statements so they fail to realize how much it is costing them. Invest time to see what you are paying now and if you can save. It will help your business every single day moving forward by doing so!
For more payments news and industry insights throughout the week, follow us on Facebook, Twitter, or LinkedIn.
